New data from First National Bank reveal an increase in household borrowing in March, signaling a modest sign of economic recovery amid ongoing financial pressures on consumers and businesses.

According to Petelina Frans, Communications Specialist at the bank, household borrowing grew by 4.1 percent in March compared to the same period last year, up from 2.9%in February.

This growth also outpaces the 2.8% recorded in March of the previous year.

The increase spanned several borrowing categories, including home loans, vehicle financing, and short-term borrowing facilities.

Notably, home loans rose to 1.9% growth in March, a significant jump from 0.4% the month before.

However, Frans cautions that this rise does not indicate a full recovery of the housing market.

She explains that the growth partly reflects comparisons with a prolonged period of weak activity rather than a surge in new demand.

Challenges such as affordability issues and limited housing access continue to restrain the market.

Vehicle financing also showed robust growth, increasing by 15.3 percent in March. Short-term borrowing, including overdrafts, improved slightly after a year-long decline.

Yet, this trend is largely interpreted as households using these facilities to manage everyday expenses amid financial strain rather than for new purchases.

Frans emphasised that despite the overall improvement, household financial conditions remain fragile.

Rising prices are expected to put additional pressure on incomes, making it more difficult for people to meet expenses and take on new debt.

Consequently, household borrowing is projected to grow at a slow pace throughout the rest of the year.